The new year brings new employment regulations

By Tony Poland, LegalMatters Staff • As Canada’s labour force continues to evolve to meet the needs of ever-changing employment realities, new regulations will be necessary to protect workers, says Toronto-area employment lawyer Brittany Taylor.

And amendments to labour laws in 2023 are meant to do just that, says Taylor, a partner at Rudner Law.

“The changes we saw in 2022, and the changes we will see in the coming year, are an attempt to modernize our employment laws to recognize that people are working very differently or in very different roles than they were 20 years ago,” she tells LegalMattersCanada.ca. “This adaptation is something that will continue to evolve both from a legislative perspective and in case law.”

Taylor says employers have had their hands full with changing government regulations during the past few years, especially during the COVID-19 pandemic. 

Difficult for some to keep up with changes

“It has been difficult for some to keep track of all the changes,” she says. “The one saving grace is that employers typically receive advance warning in terms of compliance. Still, they have had plenty to absorb.

“When regulations change, employers may need to reevaluate their workplace policies to determine if they need to establish new policies or modify existing ones, and what they need to encompass specific to their organization,” Taylor adds. “Not just what those policies should look like generally based on the legal requirements, but what the organization should implement to ensure their policies are working for them, not against them.”

She says 2023 started off with business and IT consultants who meet certain criteria being exempted from the Employment Standards Act, 2000 (ESA) as of Jan. 1.

According to the Ministry of Labour, these workers would no longer fall under the protection of the ESA if they:

• provide services either as a sole proprietor registered under the Business Names Act, or through a corporation of which they are a director or shareholder party to a unanimous shareholder agreement; and
• are paid at least $60 per hour, excluding bonuses, commissions, expenses and travelling allowances and benefits.

Some workers prefer to be treated as independent contractors

The ministry states some workers prefer to be treated as independent contractors rather than employees while some businesses were concerned about the uncertainty involved in entering into contracts with these. In particular, some businesses did not want to enter into a contractor relationship with such workers which was later determined to be, in reality, an employment relationship subject to the requirements of the ESA. This change eliminates that uncertainty.

Business and IT consultants were often misclassified, Taylor says.

“There has been confusion surrounding consultants because they tend to be highly sophisticated and independent,” she says. “There was a tendency to see them as contractors versus employees, but employers were often still taking a risk in classifying them this way, especially if they were working exclusively for the employer or were otherwise integrated into the workplace. Adding them as an exempted category, where certain criteria is met, makes that distinction clear and provides greater certainty to employers looking to retain these types of workers.”

“As a result of this change, these workers will no longer have the right to provisions such as minimum wage, hours free from work, vacation and all the other protections in the Employment Standards Act,” says Taylor. 

“Exceptions already exist for other categories of workers, such as students working pursuant to a work experience program or a holder of political, religious or judicial office.” she adds. “There are also workers who are exempt from certain provisions of the ESA, such as the entitlement to overtime. Usually, these are highly sophisticated individuals or professionals, such as lawyers and engineers for whom some of these protections simply don’t align with the demands of the job or who are better able to negotiate the terms of their employment relationship.”

Plans to address the opioid crisis

At the end of 2022, the province announced plans to address the opioid crisis with a first-of-its-kind program to provide naloxone kits and training at workplaces where there is a risk of employers witnessing or experiencing an overdose.

“Ontario, like the rest of Canada, is in the middle of an opioid epidemic made worse by a toxic supply of recreational street drugs,” Monte McNaughton, Minister of Labour, Immigration, Training and Skills Development, said when the legislation was announced. “That’s why our government is the first in North America to require naloxone kits be accessible in at-risk workplaces by June 1, 2023, to raise awareness for those struggling with addiction, reduce stigma and save lives.”

Taylor says “opioid abuse is a serious problem in society and it is bleeding into the workplace.” 

“Now that we have a date of implementation, employers will want to review their health and safety policies and consider adding language that addresses the new requirements,” she says. “Employers will also need to evaluate the risk of an opioid overdose in their workplace and determine if they need to take steps to comply before the June 1 deadline.”

ESA could be modified this year

Sometime this year Taylor says the ESA could also be modified to establish a licence for temporary help agencies and recruiters. When that happens, agencies without a licence will be prohibited from operating in Ontario, she says.

“There will also be prohibitions introduced that prevent attempts to intimidate or penalize a prospective employee who enforces their rights under this licensing regime,” Taylor says. “We have heard rumours that this probably will not be in effect until 2024 but you never know.

“The motivation, as always, goes back to the protection of employees,” she adds. “We are seeing more people going through recruiters and temporary help agencies. The government wants to ensure these individuals are being treated fairly and are protected since this is not a traditional employer-employee relationship.” 

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The provincial government will also be introducing the Digital Platform Workers’ Rights Act to provide rights and protections for those who provide ride-share, delivery or courier services for payment and are offered work assignments by an operator through the use of digital platforms. 

“We still do not know when this is going to be proclaimed into force. This is a good example of workers who are again often treated as contractors and therefore exempt from the Employment Standards Act,” says Taylor. “The government recognizes that these are individuals who are often not receiving the protections under the ESA or being taken advantage of or mistreated. 

“The Act will establish a minimum wage for these individuals while they’re on a task, but not in between,” she adds. “It also sets up the process for how an employer would go about terminating an individual’s access to the digital platform.”

Competition Act changes could impact employment landscape

One unique piece of legislation that could impact the employment landscape is not even a labour law, says Taylor. It is found in the Competition Act.

“This Act is normally not something we comment on as employment lawyers but new legislation could have significant ramifications for employers across all jurisdictions in Canada,” she says. “As of June 23, it will be a criminal offence for unrelated employers to enter into wage-fixing or no-poaching agreements.

“Any deal that agrees to fix or set or decrease or control salaries or wages across similar employers unrelated to each other, as well as any agreements between employers to not solicit or hire other business’s employees, will be illegal,” says Taylor. “The penalties for violating this provision are quite severe. Up to 14 years in prison and/or a fine at the discretion of the court, which means there is essentially no limit on the fine.”

The hero pay controversy touched off the change in legislation, it was reported. During the pandemic, many essential workers, including grocery store employees, received bumps in pay as a thank-you for their service. 

However, on June 13, 2020, the top three grocery chains in Canada simultaneously cancelled their $2-per-hour bonuses for front-line workers, drawing a reaction from the federal government.

Employers may need to reassess employment agreements

“There was some suggestion that employers within the same industry were talking with each other and agreed to reduce or take away the hero pay at the same time and the government had a real problem with that,” says Taylor. “With this change, employers are going to need to look at not just their agreements with employees but also arrangements with third parties, such as other employers, suppliers or other third parties who they are not directly related, to determine if they might be offside of these provisions.”

She says she will also be tracking developments in sick pay in 2023. It was recently announced that federal workers will receive up to 10 days of paid personal leave per year, which took effect on December 31, 2022. In British Columbia, employees with 90 days of consecutive service became entitled to five paid days of personal leave each year as of January 1, 2022.

While there are no immediate plans to amend Ontario’s sick leave laws, Taylor says that can change.

Increased recognition of the need for sick days

“There is an increasing recognition that people need to be able to take time off when they are ill without the fear of losing income or being penalized,” she says. “Otherwise, they show up at work and infect everybody. From an employer perspective, that is terrible for productivity.”

With new developments continually on the horizon, Taylor says employers must stay focused. 

“My advice is to maintain a really good relationship with your employment lawyer,” she says. “And if you have questions or concerns reach out sooner than later.”

“Many employment lawyers, including Rudner Law, have newsletters and write blog posts that are publicly available. We regularly contribute to blogs, so there is a wealth of information out there,” Taylor adds. “Even if all an employer is doing is subscribing to our newsletter or regularly reading our blogs, they will be a step ahead and have a sense of the latest developments.” 

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